Question

Someone make me feel better!  this may be long. But I want to explain it all and give every details so thank you in advance to who reads! I’m new to this whole “budgeting” thing. I’m 23, my fiancé is 22. We have a 14 month old and a baby coming April. We have about 25, 000 in debt together (some was his before we met, some was mine before we met, and some we’ve accumulated together). That includes my car and student loans, a couple crappy credit cards, furniture (ugh don’t ask), and some other stupid stuff. This isn’t including our home! I’m a stay at home mom, because daycare is too expensive so we’re solely on one income. My fiancé has been in charge of finances since I stopped working (Nov 2018) and honestly. he’s crappy at it! I never knew because even the thought of seeing our bank account sent me into panic mode. But now here we are, in such a hole, always broke, I’m just terrified we will never see the end of it! Fast forward to literally just last week. He got paid and immediately we had $100 to our name after bills / groceries. We weren’t able to pay ALL the bills and now a few are behind. So I decided to be the one in charge of finances and I want SO badly to be the one to get us out of this. I’ve been watching TBM’s videos and trying to take mental notes of all I can. With that being said, I’ve noticed her method is going to be more beneficial to us since he gets paid twice a month. BUT, he’s commission based (car salesman). So he does make decent money, but his checks are never consistent with each other. Some are way more than others. 1) How do you manage dealing with paychecks that can sometimes fluctuate of about $1000 difference? 2) How would you utilize your income taxes in my situation? **getting back $4700. I was thinking catching up on our bills first thing, then put $1000 aside for emergency fund, then trying to pay off smallest debt first and all we CAN pay off. I am thinking we can pay off 2-3 of our smaller debts completely. Should I stick to that plan or should I pay a portion of each debt I have to help our credit? Mind you, our credits were 700-800 at the beginning of the year. It’s been rough and now we’re both below 600. I just need advice lol help!  

Answer 1

Following I’m a hairdresser same thing I can’t track commission

Answer 2

You want to budget his paycheck as worst case scenario. So you would budget at just his base pay or maybe the lowest paycheck over the past 6 months. I would use your refund to make sure everything is current.  

Answer 3

Look at the last six months or so of his pay and budget on the lowest amount he made. If you can live off that, everything else will go to debt and savings. Also, i agree to get caught up on bills, EF, pay off your smallest debts and snowball the rest.  

Answer 4

Do everything you can to get caught up, then just list your bills in priority and by date due. Pay them in that order. Then when you get your taxes get a month ahead of your bills. With variable income it’s soo hard unless you are ahead of it all. If his first check is short but the second is high you’re good over the course of the month, but you’re struggling to eat for the first half. So basically you would budget your bills for March off of February income. And continue in that way.  

Answer 5

Your plan is good. Catch up on your bills. Pay off a few debts and do a debt snowball. It’s very dave Ramsey.  

Answer 6

Find the lowest paycheck and budget that amount then if he makes extra then thats extra towards debt.  

Answer 7

I’m 22 and my boyfriend is 25. We had our first child at 17/19 and second child at 21/24. I work but he makes commission. A lot of his debt was from when he had a “bad month” and put rent on there. We have a lot of debt right now so I’m probably going to start doing Uber/amazon flex in evenings/weekends and use that income strictly for our debt. With that being said we know yearly what he averages but monthly we budget the worst case scenario

Answer 8

So your plan seems spot on. As far as dealing with the fluctuating pay, we are saving up enough for 1-2 Months necessities like main bills gas and food. This way each month I can go ahead and pay everything and replenish as he gets paid no matter his check amount bc we’re always paying with last months income.  

Answer 9

I would use the program to see which method is best for you, snowball or avalanche with your extra payments.  
https://youtu.be/xyVm4aP3GXY

Answer 10

I’m a SAHM as well, I handle all finances, I would write down all your bills with their due dates. And get caught up on what’s behind, then move forward. My husband gets paid biweekly and second check is always irregular due to mandatory OT one week out of the month. But I do budget from the lowest paycheck he receive without OT. I purchased Miko paycheck worksheet, it’s like $2 and you can print out as many or often as you like. That’s what help me, assigning the check to which bills are due just seeing it on paper.  

Comments

@vitiate yes! Sign up for her 7 day email course, lots of info as well.  

Answer 11

I’m also 23 but single and rent free  anyways put your savings in a high yield savings account immediately to build interest, budget based on the lowest expected income (you should be trying to save 20% to retirement/savings)

Answer 12

Totally hear you! I stay home and my hubby gets paid 2x a month. He’s on commission but the commission check is only 1x a month. On the 1st he gets half of his monthly base + commission pay out. On the 15th he gets the other half of the base. So, I’m new to this ‘budget’ thing, too. We’re soul-budget sisters!  I’m trying to build up enough savings in a 3rd account to have as ‘swing’ money. Our savings account has just that, savings. Our checking account is where money flows in and out of fairly regularly. That’s where I budget from. But the 3rd account is for those months that go high/low. Say his base is 10k. (It isn’t, but I’m using easy math. ) do he gets 5k + commission then 5k. Month 1: 5k + 1k = 6k paycheck 1 + 5k paycheck 2 Month 2: 5k + 4K = paycheck 1 + 5k paycheck 2 Month 3: 5k + 0 = paycheck 1 + 5k paycheck 2 I’d likely base my budget on the month 1 income scenario. When I get to month 2, I swing the extra 3k into the swing account. Why 3? Because my budget is based on 1k commission. Then in month 3, you can swing 1k back into regular account to make up the difference. Does that make sense at all? You essentially set your own salary and save the rest. In this scenario, maybe once you get up to a number you’re comfortable with, say 6k, then you move the rest into savings. Hope that helps. I grew up with a dad in medical sales and kind of watched this work for my parents, so trying to replicate it. People tell me to budget based on no commission but A, commission jobs typically aren’t paid much salary so that’s not realistic and B, we’ve gotten used to the flow and know his busier (read = more profitable) times. My hubby is a commodity broker so we live and die by the ag market. ‍♀️ hopefully more living!  

Answer 13

I think you have a very solid plan of catching up what you are behind, saving $1000 for emergency fund, and putting the rest toward paying off the smallest debt and then the next smallest and so on. Then as your able to put as much as you can each month toward debt. You’ll get there, you can do this! Write down the bills you have and see what you can get rid of or reduce how much is spent on certain things. Small amounts add up quickly!